How Financial Services Must Shift to Meet Gen Z Banking Needs
As an entire generation raised on the internet comes of age, it’s time for financial service providers to pay attention if they want to compete for their business. While Millennials are known for not having the best saving habits, Gen Z’ers are being recognized for a more conservative approach to money. Having watched their parents struggle through the Great Recession of 2008, and now entering into adulthood as COVID-19 wreaked havoc on our communities and the global economy, Gen Z is learning the hard way that there is a great need for practicality when it comes to finances. Therefore, they value the lifestyle of living on less, whereas Millennials are famous for impulse buying on brand names. Gen Z’s current spending capacity is projected at approximately $143 Billion per year, and within the next five years, that is expected to increase by 70%, creating major marketing opportunities for the banking industry. Below are a few important takeaways for financial service providers to consider when planning their Gen Z Marketing Strategy.
Digital Banking is a Must
It’s no surprise that Gen Z demands digital banking services when it comes to their finances. Accounts must be readily accessible through desktop on phone. User Design and Experience must be carefully considered and simple to operate. The experience via a web browser on a smartphone must be just as well designed as what is offered in an app.
Connectivity + Contactless Payments
Not only must providers offer digital banking, but if they want to achieve loyalty from Gen Z, they must ensure that their digital services, credit and debit cards have connectivity with popular apps like Venmo, PayPal, and Square. Not only do these make transactions simpler and more time efficient, but nearly 12% of Gen Z plans on making only contactless payments, even after the pandemic has ended.
Personalization + Incentives
Personalization is critical for attracting Gen Z’ers to your brand. Most brands that this generation interacts with all day long (Netflix, Amazon, TikTok) are filtered to their individual preferences, and are constantly assessing their product usage to give them more valuable content. Financial Institutions should take a similar approach. Gen Z is cautious when it comes to money, and a 2019-20 report on Gen Z by The Center for Generational Kinetics, cited by CNBC, found that 91% would like to own a home in the future, and 69% are already prioritizing a retirement plan. The study also found that 66% of Gen Z is concerned about debt build up or not being able to pay it off in the future. There are plenty of opportunities to offer curated financial and budgeting advice, create specific product recommendations, and more personalized services to boost customer loyalty. Studies have also shown that Gen Z responds positively to personalized incentives for reaching defined financial goals.
As the pandemic concludes, and each year more Gen Z students graduate and enter the workforce, it is critical that you commit to a plan to cater your marketing and financial services to accommodate their needs. Reach out to the Strategis team today to discuss how we can help you attract Gen Z to your business.
